Local council pay bargaining opt-out may cause industrial relations headache for HR

Local councils that quit the national pay bargaining system could be setting their HR departments up for a “massive” industrial relations job, involving months of pay negotiating, dealing with pay grievances and added administration, pay experts have warned.

The decision by Local Government Employers (LGE) to offer a pay rise worth up to 1.25% has angered authorities, who deem a pay freeze to be more appropriate in the current climate. This has prompted some to consider joining the 40 or so other councils who set their own pay and conditions.

But divorce from the national system, which can be done simply by sending a letter to the LGE, could mean that inexperienced HR teams are forced to deal with work around complicated issues such as pay claims and tribunals, and will have to boost their skills in new areas.

Jim Savege, lead on pay at the Public Sector People Managers’ Association (PPMA), told Personnel Today: “Every HR team will have to develop a far greater intelligence on pay, local pay bargaining and sharpen up their industrial relations skills. This could be a massive job for HR.”

Graham White, HR director at Westminster Council, added: “The expertise and skill isn’t there [in HR], simply because they haven’t had to deal with this in their lifetime. The team at Westminster are highly skilled, but adapting [to pay negotiations] would be a challenge.”

Local authorities that have no current intention of leaving the national bargaining system have also admitted that the lengthy task of pay negotiating is a task that is better left dealt with centrally.

Justine Brooksbank, assistant chief executive, HR, at North Yorkshire Council, said: “There is something very neat and tidy about having a national system. Yes, you lose a bit of control, but you don’t end up spending months negotiating locally.”

Others that are considering a move away from the LGE to be able to match their own pay levels with the economic environment they are working within are aware of the potential task at hand.

Andy Albon, director of HR and equalities at Birmingham City Council, said: “This is a major step. It would almost certainly mean an amendment to around 60,000 staff contracts, and we certainly wouldn’t go into that lightly.”

Matthew Baker, resourcing and reward manager at Surrey County Council, where independent pay negotiations have taken place for more than 10 years, said: “It’s intensive for the HR team for particular parts of the year, but it allows us to look at what is happening within Surrey, what is affordable, and then negotiate from there.”

Setting own pay levels may lead to recruitment rivalry

An upsurge in local authorities setting their own pay levels could lead to “pointless” recruitment rivalry and competition among councils, one HR chief has claimed.

A situation where local authorities are paying vastly different wages for similar positions could potentially materialise if organisations move away from the national system, causing unhealthy competition among public sector roles.

Justine Brooksbank, assistant chief executive, HR, at North Yorkshire Council, said: “Say we want to boost social care with extra pay – you get all sorts of issues between authorities. It’s pointless, and you’re just robbing Peter to pay Paul.”